The move means ABF, which owns the Kingsmill brand, becomes the largest bread manufacturer in UK, commanding an estimated 35% share of the overall market.
From today Allied Bakeries and Hovis Group, will now operate as Hovis Bakeries, under the brand line ‘Nourishing the Nation.’
Last month, the Competition and Markets Authority (CMA) published its final report into the proposed merger of Associated British Foods (ABF) giving it the green light.
The company said its business strategy will be to invest in the segments of the UK bakery category that are growing as a result of changing consumer tastes and needs, including healthy options.
ABF said that the integration of the two businesses will commence shortly and it expects to deliver “substantial operational synergies and efficiencies across production and distribution.”
There will be “restructuring activity” to realise these benefits, but there were no further details apart from the fact these would require upfront costs and be executed “efficiently and with care.”
George Weston, Chief Executive of ABF, said the completion is a “significant step” towards the delivery of a profitable UK bread business.
“By combining our expertise, scale and capabilities with targeted investment into new product categories, this business can return to growth, provide greater consumer choice, serve our customers better than ever and so create value for shareholders,” said Weston.
“The transaction will support the wider UK economy, including by securing high-quality jobs. I am confident that our uniquely capable team have the right plans to build this business.”
Sarah Arrowsmith, chief executive of Hovis Bakeries, said: “This is an exciting opportunity to create a large and transformative UK bakery business. We will now begin the work of revitalising our brands through innovation, becoming the UK’s best own-label bakery partner and strengthening our position as the bakery industry’s route to market through our unique direct-to-store network.”
